New York Stock Exchange (NYSE)
In 1790, Philadelphia merchants who had helped finance the Revolutionary War effort supported the creation of the first U.S. stock exchange to trade the young federal government's $80-million debt. In 1792, spurred by the ensuing speculative boom, 24 traders gathered at 68 Wall Street and signed the Buttonwood Tree agreement, marking the foundation of the New York Stock Exchange. The agreement sought to regulate commissions to trade war bonds issued by the fledgling U.S. government and two banks. One of these banks, the Bank of New York, is still listed on NYSE today.
In the more than two centuries that have followed since the NYSE was founded, the exchange has evolved to become the world's largest and most liquid cash equities exchange.
In 2006, NYSE merged with the Archipelago Exchange (ArcaEx) to form NYSE Group, Inc. The newly combined exchanges merged with Euronext in 2007 to create the first truly global financial marketplace group. Subsequent mergers and acquisitions placed the American Stock Exchange (NYSE MKT), NYSE Liffe U.S., ArcaEdge and other marketplaces under the NYSE Euronext umbrella. In 2012, IntercontinentalExchange (ICE), the second-largest futures market, agreed to acquire NYSE Euronext for cash and stock worth $8.2 billion.
The NYSE has a unique market structure designed to provide a balanced combination of "high-tech" for fast, automated and anonymous order execution; and "high-touch" for discovering and improving prices, dampening volatility, adding liquidity and enhancing value.
This blend of electronic trading and traditional, open-outcry, auction-market trading allows buyers and sellers to meet directly in a fair, open and orderly market to compete for the best possible price.
At the center of the NYSE are Designated Market Makers (DMMs). DMMs, formerly known as Specialists, are obligated to maintain fair and orderly markets for their assigned securities. These market professionals facilitate price discovery during market openings, closings and periods of trading imbalances or instability.
DMMs work with Trading Floor Brokers who represent public orders to buy and sell shares. Floor brokers participate both in person and electronically on the trading floor to achieve best price execution for their customers.
Supplemental Liquidity Providers (SLPs) are the newest component, engaging electronically as high-volume members incentivized to add liquidity on the NYSE and NYSE MKT.
NYSE and NYSE MKT are the only two U.S. exchanges that offer parity allocation of liquidity to customer orders. This model permits competing orders at the same price and from multiple Floor Brokers and DMMs along with orders at the top of the electronic book to trade together and share executions according to a specified priority model.The market model also rewards participants who set the NYSE Best Bid/Offer (BBO) by providing those participants with priority over other interest at the same price point.